With the Post Office scheme, you can become a millionaire by saving just ₹416 per day and also benefit from a pension of ₹61,500. However, you will need to plan your investments differently.
In addition to bank fixed deposits, a large community invests in small savings schemes offered by the Post Office. The government operates various schemes through the Post Office, such as the PPF, Sukanya Samriddhi, and the Senior Citizen Savings Scheme, whose interest rates are settled quarterly.
These are risk-free plans that offer guaranteed income. With patience and proper planning, you can not only receive a substantial sum upon retirement, but also ensure regular income.
Today, we’ll tell you about a unique investment option in a post office scheme. You can save a small amount and accumulate millions of rupees by retirement, while also securing a quarterly pension. However, this requires investing in two small savings schemes, namely the Public Provident Fund (PPF) and the Senior Citizen Savings Scheme (SCSS).
First, invest in the Public Provident Fund (PPF).
PPF is a scheme that can accumulate a substantial amount if held for a long period. The government offers an annual interest rate of 7.1%. Anyone can start investing in it. Its maturity period is 15 years, but you can extend it twice by 5 years each if you wish. It is a tax-free scheme, as the maximum investment limit is only Rs 1.5 lakh per year, and up to Rs 1.5 lakh is exempt under Section 80C of the Income Tax Act.
Saving ₹416 every day
now raises the question of how much you should invest. If you can’t afford to invest ₹1.5 lakh annually in PPF, you should invest ₹12,500 monthly. If you can’t even manage this amount monthly, saving ₹416 every day can help you deposit ₹1.5 lakh annually in PPF. This will be completely tax-free.
- If you do this for 15 years, then on maturity, based on 7.1 percent interest, you will have a deposit of around ₹41.35 lakh, in which the total investment will be ₹22.50 lakh and the interest will be ₹18.85 lakh.
- After 20 years, this amount will be around ₹67.69 lakh, in which the total investment will be ₹30 lakh and the interest will yield around ₹37.69 lakh.
- After 25 years, this total amount will be Rs 1.03 crore, in which the total investment will be Rs 37.50 lakh and the interest income will be Rs 65.50 lakh.
Start investing in SCSS now.
The Senior Citizen Savings Scheme is a scheme that is open to individuals aged 60 and above. However, if an employee has voluntarily retired at age 55, they can invest even at age 55. The maximum investment allowed is ₹15 lakh in a single account and ₹30 lakh in a joint account. This scheme offers an interest rate of 8.2%.
Suppose you invested in PPF at age 35. After 25 years, when you’re 60, you’ll receive ₹1.03 crore from PPF. Now, you can invest just ₹30 lakh of this amount in SCSS under a joint account, leaving you with ₹73 lakh.
Investing ₹30 lakh in SCSS will earn you ₹61,500 in interest-only payments on a quarterly basis for five years. After five years, you can withdraw your principal of ₹30 lakh or extend it for another three years.
- Annual Interest: 8.2% of ₹30,00,000 = ₹2,46,000
- Quarterly Interest: ₹2,46,000 / 4 = ₹61,500
It is worth noting that once you invest, the same interest rate remains applicable for your maturity period, even if the government changes the rates later.
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